Finance Secretary Carlos Dominguez III has urged Mexico-based technology and manufacturing companies to look into the possibility of making the Philippines the center of their operations and entry point to the lucrative market of the 10-nation Association of Southeast Nations (ASEAN).
Dominguez said Mexico, which is now emerging as a top exporter of high-technology goods, can take advantage of the Philippines’ young, talented workforce and reasonable labor costs.
The finance chief extended his invitation to Mexican technology entrepreneurs through Mexican Ambassador Gerardo Lozano Arredondo during their recent meeting to discuss ways of expanding economic relations between the Philippines and Mexico.
“We’d like to go with Mexican companies, particularly with your high-technology companies—you have good experience in manufacturing high-tech products in the US market. We would like to invite you to come and invest here—probably for the Mexican companies to use Philippines as a base to enter the ASEAN market,” said Dominguez during his meeting with Lozano.
The Philippines, Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand and Vietnam comprise the 630-million strong ASEAN market.
In response, Lozano said that with the “excellent historical relations” between the two countries, “the Philippines can be the door for Mexico” to the ASEAN.
“We are trying to diversify our relations and we consider Asian countries as our very important option,” said Lozano during the meeting.
Based on World Bank data, Mexico is now one of Latin America’s top exporters of high-technology goods with $46.81 billion worth of high-technology exports in 2016.
Dominguez pointed out that while other countries in Asia face the problem of aging populations, majority of Philippines’ labor force consists of young people.
“We will be happy to certainly host you here,” Dominguez told Lozano. “As you know, the tariff rates among ASEAN countries is now quite low, In fact zero in most cases and this is an opportunity for your companies to come and set up manufacturing here.”
Lozano said a series of consultations tentatively scheduled in March in Mexico between Philippine and Mexican officials woud be a good opportunity to expand political and economic ties between the two countries.
“We are planning to invite some Philippine businessmen to join the delegation to come in order to meet Mexican businessmen and discuss opportunities for new businesses,” Lozano said.
During the meeting, Dominguez also thanked the Mexican government for hosting the tax reform team sent by the Philippines’ Department of Finance to Mexico last year to study the tax on sugar-sweetened beverages (SSBs).
“They brought back a lot of ideas (from Mexico). As a result of the tax team’s consultation, we were able to pass a sugary tax law last month,” Dominguez told Lozano.
The tax on SSBs is among the provisions of the Tax Reform for Acceleration and Inclusion Act (TRAIN), which was signed into law by President Duterte last Dec. 19 and that took effect last Jan. 1.
During the meeting, Dominguez also briefly informed Lozano about the other provisions of TRAIN such as the reduction of the personal income tax rates, and the corresponding upward adjustments on consumption taxes, as well as the succeeding tax reform packages of the Duterte administration which covers corporate taxation and the modernization of fiscal incentives; the taxes on tobacco, alcohol, mining, coal, and casinos; property taxation; and passive income and financial taxes.
He likewise apprised Lozano of the rollout of infrastructure projects under the government’s “Build Build Build” program.
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